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Apple Supplier GoerTech Moving AirPod Plant to Vietnam to avoid Possible Escalation of China-USA Trade War

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China's GoerTek has become the first of Apple's leading equipment suppliers to confirm plans to shift production out of the country to avoid being caught up in the escalating trade war between Washington and Beijing.


Apple had been planning to launch updated AirPods by the end of this year, but the plan could now be rescheduled to next year, according to industry sources. It is not clear whether GoerTek plans to produce the existing or new models of AirPods in Vietnam played any role in the delay.


The Nikkei Asian Review has discovered that the AirPods assembler has notified suppliers that it intends to move production of the wireless earphones to Vietnam.


At the same time, two other smartphone suppliers -- Taiwan's Pegatron and Cheng Uei Precision Industry -- are looking at expanding capacity outside China for similar reasons, although this may not include Apple equipment.


GoerTek has asked all suppliers involved in AirPods production to confirm by the end of this week whether they can ship all necessary materials and parts directly to Vietnam. , The decision has not yet been finalized as it requires further discussion with Apple, which has been informed of the plans.


James Wei, a Hong Kong-based analyst at Yuanta Investment Consulting stated for the report that "Apple is the most obvious target if China wanted to retaliate on American companies. Apple and its key suppliers are without doubt subject to highly uncertain political risks as the trade battle continues to heat up."


AirPods, along with the Apple Watch and smart speaker HomePod, were initially included in the $200 billion worth of Chinese goods that were hit with 10% tariffs beginning on September 24. However the products won a last-minute exemption. Industry sources said many suppliers are concerned that they could be hit again soon with the U.S. president threatening to impose additional tariffs on the remaining $267 billion of imports from China in the near future.


Meanwhile, Cheng Uei, which supplies chargers and connectors for iPhones and Android smartphones, said it is considering bringing some production back to Taiwan and Southeast Asia because of the U.S.-China trade tensions.


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